There are many reasons why people invest in insurance. Insurance is a great way to protect yourself against financial loss, build up a cash reserve for emergencies, and reduce your risk of becoming disabled or dying early.
Protect Against Unexpected Expenses
One of the most important things you can do for yourself is protect against unexpected expenses, says Dj Bettencourt. We all know how quickly unexpected costs can add up, and if you don’t have enough money saved up to pay for them, it can cause serious problems in your life. Insurance helps you avoid debt by paying out on claims when they occur–and sometimes even before they occur (for example with health insurance).
In addition to protecting against debt, insurance also helps with taxes: if an insured loss occurs then there will be no tax due on any proceeds received from an insurer unless those proceeds are used for non-reimbursable purposes such as replacing lost income or repairing damaged property.
Build Up A Cash Reserve For Emergencies
An emergency fund is a stash of cash that you can use to cover unexpected and unplanned expenses. You should aim to have at least three months worth of living expenses saved up in case something happens, like losing your job or needing to pay for medical bills.
Insurance Can Help You Avoid Debt
Insurance can help you avoid debt. If a large expense comes up, Dj Bettencourt like a car accident or the loss of your home, insurance will protect you from having to pay out of pocket. This means that if something happens, you won’t have to worry about how to pay for it–and this feeling of security can be invaluable when trying to rebuild after an unfortunate event.
